This article was first published in the February 2014 Singapore edition of Accounting and Business magazine.
Attracting, developing and retaining talent has always been a key focus of Singapore’s accountancy sector. Over the last year, however, new facets have been added to the talent issue. Foreign recruitment came under scrutiny following the launch of the Population White Paper in early 2013, with the Ministry of Manpower (MOM) later announcing a series of curbs on foreign labour that target Employment Pass (EP) holders in particular – professionals in managerial, executive or specialised jobs.
Under the new Fair Consideration Framework, revealed last September, employers need to consider Singaporeans fairly before hiring skilled professional foreigners. The framework comes into effect from August 2014. All sectors are going to be impacted by the rules, especially those highly dependent on foreign talent such as banking and finance.
The shifting employment paradigm also places the spotlight on accountancy firms’ own ability to attract and develop local talent. Compared with the impact that MOM’s curbs have had overall – the number of EP holders has been decreasing since 2012 and the number of S Pass holders is showing a sharp slowdown in growth – the accountancy sector’s reaction to the changes has been fairly muted.
Stella Tang, director of recruitment specialist Robert Half in Singapore, says that her firm has not observed a dramatic change in accountancy firms’ recruitment patterns over the last year. On the other hand, firms are now more likely to indicate a preference for local candidates and the consultancy is seeing more local hires, particularly in higher management roles.
One reason for the lack of significant change observed by Robert Half may be that firms are already doing their best to hire and develop locals. The sector’s largest employers, the Big Four firms, exemplify this: all actively focus on recruiting local talent wherever possible without compromising the quality of their services.
PwC Singapore’s human capital leader Sam Kok Weng describes it as a ‘delicate balance’ between building a workforce that meets client needs, and respecting the economic and social agendas of the country where the firm operates. ‘Prior to the Fair Consideration Framework, through dialogues with government agencies and consideration of other policy changes, we have been cognisant of the overall direction of the country to help Singaporeans and permanent residents stay competitive in the job market to preserve social stability in Singapore,’ he says.
Quek Shu Ping, head of people, performance and culture for KPMG in Singapore, further highlights that it makes sense for firms’ hiring philosophy to centre on the country where they operate: ‘As a Singapore firm, we have always adopted a Singapore core philosophy as far as employment is concerned,’ he says. ‘In other words, our local workforce makes up the majority of our staff population and we hire locally as far as possible.’
However, he also points out that instances occur when the necessary experience or specialised skills are simply not available in the local market, and in such cases the talent search may extend offshore. ‘These talents can be hired directly or sourced within the KPMG world where secondments make good business sense,’ he says.
The launch of the Singapore Qualification Programme (QP) has also made it possible for non-accounting graduates to join the profession, opening up a new source of talent. The Singapore QP, which is administered by the Institute of Singapore Chartered Accountants, is described by the Singapore Accountancy Commission as ‘one of the key instruments for developing talent in the accountancy sector for the Singapore and Asia-Pacific marketplace’, and it has already drawn considerable interest from both graduates and firms.
Teo Cheow Tong, senior HR partner at RSM Chio Lim LLP – the largest accountancy and business advisory group in Singapore outside the Big Four – says that his firm’s hiring preference will always be local candidates and permanent residents, as they are able to operate effectively within the local culture. However, to tap into a larger pool of candidates, the firm is willing to consider foreign talents who meet MOM requirements.
‘We have always embraced the principles of the Fair Consideration Framework and this has helped us to focus our hiring based on merit, skills and candidates’ abilities,’ Teo says.
Small and medium-sized practices (SMPs), too, prefer local candidates. But for many, preference breaks down under the pressure of practicality; they simply cannot recruit Singaporean graduates whose own preference is for the largest firms.
‘It’s not that we don’t want to offer places to locals. There are no locals!’ says Ravi Arumugam, CEO and managing partner of mid-tier boutique firm RT LLP. Arumugam says that despite his best efforts, a large proportion of his staff are still non-Singaporean.
This is causing Arumugam concern in view of the new EP restrictions: in SMPs, managers are typically assigned to a portfolio for the long term, where they build up extensive experience and client relationships. However, the increase in the qualifying salary for employment passes means that in order to keep their experienced non-local staff, SMPs have no choice but to raise salaries. This may be helpful in attracting locals, but the impact on firms’ margins may be serious in the long term.
Perhaps counter intuitively, the greatest change in the accountancy sector’s hiring practices comes not from the foreign labour curbs, but the Singapore QP and the Accredited Training Organisation (ATO) initiative launched by the Singapore Accountancy Commission (SAC). Under the ATO programme, employers may apply to the SAC to be certified as suitable for Singapore QP candidates to fulfil the practical experience component of the qualification, and only ATOs may hire Singapore QP candidates.
Firms have been quick to recognise the value of the Singapore QP and the ATO programme in providing them with a new source of talent. The SAC began certifying ATOs in January 2013, and more than 120 organisations were accredited by the end of the year. These include government agencies, major corporations and a large number of accountancy firms from the Big Four onwards.
‘Being an Accredited Training Organisation endorsed by the SAC has helped to draw local graduates to us, as we are seen as an organisation that not only provides structured training but also support for trainees,’ says Teo. Where necessary, he adds, his firm will adjust the terms for accounting versus non-accounting graduates taking the Singapore QP.
According to observers, the impact of the Singapore QP is all the greater for the foreign labour curbs having come when they did. ‘The Singapore QP is the compensating factor,’ says Loh Oun Hean, a principal of HR consultancy HR Advisory Asia, explaining that the tightening on the inflow of foreign talent will have the greatest impact on hiring practices in the long term because of the headcount scarcity it creates.
Those firms that are reacting to the Fair Consideration Framework, meanwhile, are doing so not by adjusting their recruitment policies but by examining it on a broader basis.
‘What the framework has prompted us to consider, in conjunction with the changes in the accountancy sector, is to diversify the target population of candidates to include a significant number of non-accounting local graduates and thereby have a larger catchment pool of Singaporeans to hire from,’ says Sam. ‘We are more deliberately monitoring statistics on the profile of our workforce by nationality and reviewing the trends so as to make adjustments to the hiring policy where appropriate.’
The competition for talent can be stiff in the accountancy sector, » and firms often go the extra mile to reach out to the people they want. Often, they liaise with educational institutions to offer places to top graduates or participate in career talks to connect directly with students. Retaining talent – a major challenge given the long hours worked in the profession – is a question of providing sufficient training and support, a structured career plan and progression and, for those firms with the resources, overseas secondment opportunities where practical.
In addition, says Teo, helping staff maintain their work-life balance can be beneficial. ‘Beyond addressing the career needs of our staff, we also believe that all who work hard should play hard as well. For example, our staff recreational club organises activities to inject more fun into the workplace,’ he says.
Even while doing more, employers remain discerning. Firms look for qualities beyond technical competence and academic qualifications; their wish lists include characteristics such as commitment, professionalism and a willingness to learn. They may be wary of graduates, whether local or foreign, who may display certain traits associated with ‘Generation Y’ and the so-called ‘strawberry generation’: demanding, interested in instant gratification and unable to take criticism.
‘We would like to see the local candidates to be more self-aware, risk-taking and entrepreneurial,’ says Sam. ‘Local candidates who “think out of the box”, generate original ideas and take calculated risks tend to be successful in the long run. Leadership and ability to leverage more effectively on others in this connected work are also attributes we hope to see more evidently in our applicants – local or otherwise. In general, we are on the lookout for candidates that possess a positive frame of mind, are keen to learn and have perseverance.’
Candidates also need to have the same values as the firm, says Teo, pointing to the formal guiding principles of RSM Chio Lim’s service delivery. ‘Together, the seven Ps – passion, perseverance, professional, proactive, personal, practical and progressive – form an integral part of our value system. Hence, the candidates we hire must possess these traits,’ he explains.
Most importantly, say firms, candidates must be in the sector because they want to be there, regardless of whether they are drawn by salaries, job stability, long-term prospects or even the glamour. ‘Their value proposition must be, “I’m here because I want to be in the profession”,’ says Arumugam. ‘With that kind of commitment, audit quality is automatically there.’
Fair Consideration Framework
In September 2013, the Ministry of Manpower (MOM) announced a Fair Consideration Framework aimed at eliminating discriminatory hiring practices. From 1 August 2014, the following key features will come into effect:
- Firms making new Employment Pass (EP) applications must first advertise the job vacancy on a new jobs bank administered by the Singapore Workforce Development Agency.
- The advertisement must be open to Singaporeans, comply with the Tripartite Guidelines on Fair Employment Practices and run for at least 14 calendar days.
- Small firms with 25 or fewer employees, and those jobs that pay a fixed monthly salary of S$12,000 and above, will be exempted from the advertising requirement.
- Firms identified as having scope to improve their hiring and career development practices will be asked to provide MOM with additional information. If unresponsive, they may be subject to additional requirements.
Separate from the framework, MOM has raised the base qualifying salary for EPs by 10% from January 2014. The salary requirement further increases proportionately to the applicant’s age and experience.
Mint Kang, journalist